France and Germany this month awarded a 65 million euro ($74 million), two-year contract financed equally by both countries to Dassault Aviation and Airbus to start designing a next-generation combat air system for use from 2040.

Britain's departure from the European Union without a deal would doom the prospects for a Franco-German next-generation fighter jet with a rival project in Britain, the head of Airbus Defence and Space told the Handelsblatt German newspaper.

Dirk Hoke told the newspaper he considered it "absolutely imperative" that the EU reach an agreement with Britain on security, defence and space given the closely interwoven ties between Europe and Britain.

"I consider it extremely dangerous to develop a system like FCAS (the Franco-German fighter programme) without the British," he said, noting that potential order quantities would rise if Britain participated, making future aircraft more competitive.

France and Germany this month awarded a 65 million euro ($74 million), two-year contract financed equally by both countries to Dassault Aviation and Airbus to start designing a next-generation combat air system for use from 2040.

Hoke said there were discussions about Spain joining the Franco-German programme, but the Brexit negotiations would be decisive in determining any cooperation with Britain.

"In Britain's case, we have to wait to see if there will be a hard Brexit," he told the newspaper. "That would be fatal for the cooperation."